Reality Check: Time to Wake and Smell the Digital

Fiserv executive Mark Sievewright told the Reality Check Conference that the world is hip-deep in the digital era. There is no real choice. Embrace the digital or perish.

The message Fiserv executive Mark Sievewright delivered last week at the New Jersey Credit Union League's annual Reality Check Conference in Atlantic City, N.J., was loud and succinct: We are hip-deep in the digital era and, ready or not, the bits and bytes are rising fast. There is no real choice. Embrace the digital or perish.

Stark words? You bet, but Sievewright was joined by a parade of speakers with similarly plain pitches. Marketing consultant Paul Lucas, for instance, was insistent that many credit unions are simply clueless about their branding.

Identity theft expert John Sileo had dire warnings that sheer gullibility and a determination to please could cause major losses of member identities.

Motivational speaker Tim Sanders had a message that social responsibility, determining to do good, is a path to prosperity but that is not a straightforward course.

Complexities ruled at Reality Check because, frankly, complex times call for complex ideas. Or so suggested the speakers, which also included Anne Legg, a marketing executive at Cabrillo Credit Union in San Diego, and Randy Smith, publisher of cuinsight.com. Also on the lineup were John Lass, a business development expert at CUNA Mutual, and Kenneth O'Connor, an expert on students and their banking needs at Fynanz Inc.

Back to Sievewright, who began his talk with a call to arms, "It's about mobile, mobile and more mobile."

The Fiserv executive stressed that there are four more big trends that credit union executives need to embrace:

What about branches? Sievewright pointed to Blockbuster, the once dominant movie rental company that powered to prosperity by virtue of its huge branch network only to watch all that crumble as Netflix moved in with alternative distribution, movies sent directly to consumers. The plain message is that branches will not support a lot of weight going forward.

A Sievewright infographic showed the sobering numbers: 60% of us bank online, 66% prefer the Internet for financial information, and 41% pay bills online. Add that up and the shift to digital becomes hard to ignore.

As for member service, Sievewright said, “Within 10 years, service quality will be measured, to a large degree, by how much self-service you provide your members.”

Sievewright also suggested that worrying about banks and other credit unions may be to miss the bigger threats. He ticked off a lengthy list of nontraditional players with keen interest in financial services, from the expected (Walmart) through digital newcomers such as Google (with its Wallet), Apple (with its huge cash reserves and deep iTunes user database), Facebook and Amazon. The new reality is that many younger people might have higher trust in an Apple than in any credit union, said Sievewright, and that is a concern that has to dog the industry as it prepares for a generational shift.

The core Sievewright take-away was that the credit unions that prosper in the 21st century will be the ones that develop and optimize digital channels. That is the only path, he said.

But even that well-defined path can be muddied with the wrong marketing, said Lucas, who, in a lively presentation, took a gimlet-eyed look at how many credit unions blunder in their marketing, typically by starting with a pompous, nonsensical or confusing tagline.

He said, "A tagline is a branding slogan. The idea is to create a memorable phrase that sums up the tone and premise of your brand."

More Lucas tips are to keep a tagline short (three to seven words), be clear and give your brand a unique identity.

He pointed to a couple of well-known, non-credit union instances as shining examples of getting this right, such as Walmart's "Save Money. Live Better" and "Life Takes Visa."

A longtime credit union practice has been indifference to branding and clinging to casual approaches to marketing but, suggested Lucas, that won't work today. "Branding is now critical to your success," he said.

He added, "Retail marketing must support a brand based on value/benefits, trust and individual appeal; what can you do for me now?"

"Create an emotional connection with members," said Lucas, and good things happen. Don't do that and the opposite will occur.

Matters took a sterner turn when identify theft expert John Sileo took the stage with his message, "information is currency," and there are plenty of criminals out there eager to loot a credit union's store of member identities.

Strong advice from Sileo included tips for greater personal information security. For instance, password protect smartphones (usually done in settings) and be wary of public, unencrypted Wi-Fi networks, such as the ones found at coffee shops.

He accentuated the warning that, for many credit unions, a huge worry, as big as, and maybe even bigger than, computer hackers gaining entry into sensitive systems, is that thieves will use social engineering to sweet talk their way into gaining passwords and access information from unwary employees who only aim to please.

"Think like a spy," Sileo intoned and, by his explanation, spies see the value in information. They want to steal only what is highest value, and they are ruthless in that pursuit. Fending them off takes equal determination and, indicated Sileo, credit unions today have got to have that determination because even more valuable than the cash in the vaults just may be the member information, credit card numbers, social security numbers, dates of birth and more, that are on file. Because that info in turn can be used to loot more money.

"Privacy is like oxygen" said Sileo. "You don't notice it until it is gone."

And that is a sad reality no credit union wants to wake up to, he said, so make information protection a high priority. "That is how to seek to stay safe, by working at information security."

Getting the message from reality check? It is indeed a new reality, at least that is what these speakers, one after another, told their audience.